Working Paper: CEPR ID: DP18472
Authors: Bertrand Garbinti; Cecilia Garcìa-Penalosa; Frederique Savignac; Vladimir Pecheu
Abstract: This paper is the first to compute lifetime earnings (LTE) in France for a large number of cohorts, that entered the labour market between 1967 and 1987. We compare with evidence by Guvenen et al. (2022) for the US, documenting sharp differences between the two countries. Median LTE show similar flat trends in both countries, but in France this results from a moderate increase for both genders together with increased female participation, while in the US, LTE declines for men and sharply grows for women. There have been marked changes in age profiles, as for both genders younger cohorts have experienced a decrease in entry wages that has been more than offset by faster wage growth. Our analysis of inequality finds that it is lower when we focus on LTE than in the cross-section, and that it follows a U-shaped pattern, although the increase is much smaller in France than that observed in the US. Lastly, we also find that i) education (returns and changes in attainment) plays a key role in shaping LTE across cohorts, and ii) differences in working time explain an increasing part of the gender gap in LTE over time as both men and women have increased the number of years they work but women have done so largely through part-time employment.
Keywords: inequality; lifetime earnings; gender; earnings gap
JEL Codes: J16; J31; J62
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| gender dynamics and labor force participation (J21) | overall lifetime earnings trends (J31) |
| timing of labor market entry (J29) | subsequent earnings inequality (D31) |
| education returns and changes in attainment (I26) | lifetime earnings across cohorts (J31) |